TAXMAN Posted May 25, 2021 Report Share Posted May 25, 2021 My church friends. TP died, left stock to church. If church sells stock to fund their missions and make improvements on their building is it considered UBTL income or is it considered regular church income not subject to tax? Quote Link to comment Share on other sites More sharing options...
Gail in Virginia Posted May 25, 2021 Report Share Posted May 25, 2021 If they sell it as soon as they receive it, then it was a contribution of property and not investment income or UBTI. If they hold it until it has appreciated in value considerably, then the gain would be investment income. 3 Quote Link to comment Share on other sites More sharing options...
TAXMAN Posted May 25, 2021 Author Report Share Posted May 25, 2021 tp died about 5 years ago. stock up has went up since then. I realize this would be investment income. I guess the question is will the church owe tax on this gain? Quote Link to comment Share on other sites More sharing options...
Lion EA Posted May 25, 2021 Report Share Posted May 25, 2021 Depends on the amount of UBTI... Are you the church treasurer? Stewardship chairman? An officer of any kind? Even if not, get the work to those that are: selling stock gifts upon receipt is a best practice. 2 Quote Link to comment Share on other sites More sharing options...
Gail in Virginia Posted May 25, 2021 Report Share Posted May 25, 2021 I did not think that investment income, such as appreciation on stocks, was subject to UBTI unless it was debt financed. Most of the organizations that i deal with sell stocks as soon as they get their hands on them, however, so I could not say for sure without research. 2 Quote Link to comment Share on other sites More sharing options...
Margaret CPA in OH Posted May 25, 2021 Report Share Posted May 25, 2021 Gail is correct. Interest and capital gains are not taxable to 501(c)(3) organizations. They are not considered business income unless directly related to unrelated (purpose of exemption) business. 2 Quote Link to comment Share on other sites More sharing options...
TAXMAN Posted May 25, 2021 Author Report Share Posted May 25, 2021 Thanks to all. I thought so but second opinion's strengthen the thought. Quote Link to comment Share on other sites More sharing options...
Recommended Posts
Join the conversation
You can post now and register later. If you have an account, sign in now to post with your account.